Interview: UAE Ambassador to Washington on building economic relations with US
As the UAE Ambassador in Washington, Yousef Al Otaiba is the voice of the Emirates in America. He explains to Frank Kane his role in the growing commercial relationship between the two countries.
What do you see as the UAE’s strategic business interests in the USA?
The US and the UAE have a lot in common when it comes to how we view business. On a strategic level, we both see the power and benefits of open markets that spur trade, innovation and entrepreneurship. The more we can build upon that foundation the better off both the UAE and US will be.
I see business exchanges between the US and the UAE as a two-way street. The UAE has one of the most open and innovative economies in the world, and over the years we’ve demonstrated that the UAE is a dependable and significant economic partner of the US.
The UAE is the US’s largest export market in the Middle East for seven consecutive years, and trades with all 50 US states. UAE investments in the US support hundreds of thousands of American jobs each year. Business partnerships between our countries are creating opportunities in sectors from transportation, aviation, and health care to semiconductors, construction, and defence.
Mubadala’s $6 billion investment in US-based GlobalFoundries, the second-largest semiconductor chip maker in the world, supports nearly 5,000 jobs in the north-east US.
In 2009, Dubai World’s Infinity World Development partnered with MGM Resorts International to build CityCenter Las Vegas, the largest privately funded construction project in US history. These are great examples of how the UAE contributes to the American economy and creates jobs.
In your experience, how do American companies view the UAE and the GCC region?
Based on conversations I’m having with the US business community, I can tell you that more and more American companies are realising all the opportunities that the UAE has to offer.
The UAE is secure and stable, has a world-class infrastructure, and is strategically located just a short flight from other business centres in the Middle East and emerging markets in India, Africa, and South Asia. There is no better place for US companies to access some of the world’s fastest growing economies.
You can tell this by the sheer amount of global activity that is taking place in the UAE.
Jebel Ali in Dubai is one of the top 10 busiest container ports in the world. Dubai International Airport is the world’s busiest airport for international travellers.
And eight of the world’s top economic free zones are located in the UAE. That’s why we see so many US business seeking out opportunities in the UAE.
One example is the DC-based tech incubator 1776, which recently announced that it will be opening an office in Dubai.
They are coming to the UAE because it is the centre of innovation and entrepreneurship in the Middle East region. Just look at how many US companies are in the UAE. When 1776 opens its office, it will join more than 1,500 US firms already present in the UAE.
What are the challenges in increasing trade flow between US and UAE?
Trade must be a two-way street. As the UAE economy has grown, our companies have grown into global brands and competitors.
Our airlines, for example, are now among the best in the world. But rather than figure out how to compete in the marketplace, unfortunately, some US and European airlines have been pushing their governments to reconsider 25 years of Open Skies aviation policies and to limit UAE airline access and growth.
The Open Skies agreement leads to great benefits for Americans and Emiratis alike. Combined, UAE airlines are the largest buyers of US-made airplanes. At the 2013 Dubai Airshow, Emirates, Etihad and flydubai placed $120 billion in orders for more than 300 Boeing passenger and freighter airplanes, most with GE-made engines. These orders are supporting hundreds of thousands of high-skilled US jobs.
Emirates and Etihad’s growth in the US market also creates jobs.
Last year, 3 million people flew between the UAE and 10 US cities on more than 280 non-stop flights each week – translating into hundreds of jobs and leading to billions of dollars in increased investment, trade, and tourism in both directions.
What sectors do you view as the best opportunities for increasing US-UAE trade?
There are a lot of opportunities for American business in the UAE. Just look at how diversified the UAE economy is becoming, with non-oil sectors representing 70 per cent of our GDP.
As the UAE keeps diversifying, there will be opportunities in a wide range of sectors. That includes media, telecom, education and tourism. It also includes renewable energy and petrochemicals, transportation, and financial services.
Infrastructure development projects across the UAE are also supporting billions of dollars in US exports and driving growth. These projects include support for the UAE civilian nuclear energy programme, the construction of new airports in both Abu Dhabi and Dubai, and the expansion of commercial seaports across the UAE.
In addition to economic diversification and infrastructure, I’d like to say a few more words about the UAE’s geographic location as a hub between East and West. More and more, we are seeing US businesses choose this as a location to set up their regional offices or hold conferences that bring together people from all over the world.
Expo 2020 in Dubai, which will bring in 25 million visitors, is a great example of the UAE’s potential as a convener. I think that’s something companies should give serious thought to when they’re looking at new places to do business.
One rising sector that US businesses should keep their eye on is aeronautics. In June, Nasa administrator Charles Bolden visited the UAE and signed an outer space and aeronautics agreement with the UAE Space Agency. As this partnership develops and the UAE space programme continues to grow, I envision more opportunities for American companies. For example, Lockheed Martin recently announced that it will work with the UAE Space Agency on a training programme for students and early career professionals in space fundamentals.
Defence is another area to examine. The UAE is one of the largest foreign military sales customers of the US. Over the past decade, the UAE has purchased more than $20 billion in US defence hardware and services. That includes one of the largest non-US F-16 fleets, with 80 of the world’s most technologically advanced F-16 aircraft, the Block 60. Not only are our militaries working closely together, but our defence industries are too. You can see this through UAE partnerships with Lockheed Martin, Boeing and others that are creating jobs and deepening expertise in the UAE.
Also, perhaps not as obvious, but the healthcare sector is an area with a lot of good exchanges happening. Cleveland Clinic Abu Dhabi is expanding access to world-class medical care, and the Sheikh Zayed Institute at Children’s National Medical Centre [in Washington] is driving cutting-edge advances in pediatrics by partnering with many UAE hospitals and medical professionals.
Earlier this year, the MD Anderson Cancer Center at the University of Texas inaugurated the Sheikh Zayed Building for Personalised Cancer Care, which will focus on accelerating the pace of personalised cancer therapies and pancreatic cancer research.
Beyond the social well-being and health aspect of these initiatives, they’re also helping drive both the UAE and US economies.
Have American attitudes to doing business with the UAE changed during your time as ambassador, especially in light of the easing of sanctions with Iran?
In a turbulent region, the UAE continues to stand out as a stable, reliable US ally with a highly developed modern infrastructure. I’m confident this will continue to make it a desirable place for American companies to do business long into the future.
Across the board, I’m very encouraged by the development in the US-UAE business relationship during the last eight years. Since 2008, trade has increased by more than 400 per cent and the UAE has become one of the United States’ largest sources of foreign direct investment.
Total bilateral trade increased from $5.22bn in 2004 to $25.4bn last year, and the UAE has now been the largest export market for US goods in the Middle East and North Africa region for seven years in a row.
There’s one example in particular that I think demonstrates the growth in the relationship that we have seen. A decade after the DP World incident, the UAE’s Gulftainer now operates a cargo port at Port Canaveral, Florida and has plans to expand further in the US. I think this really shows how far we have come in terms of clearing up misunderstandings and creating economic opportunities that benefit both the US and the UAE – as well as the global economy.
On Iran, no country is better positioned to benefit from increased trade with Iran than the UAE. We have the advantage of proximity, of historic trading relationships, of access for Iranians to capital and expertise. But UAE companies – and US companies too – should be fully aware of the risks of doing business with Iran and should proceed with great caution. Iran’s continuous and often hostile interference in regional affairs creates political risk for business. Many Iranian entities are still under sanctions or closely aligned with questionable entities. The state department’s Country Reports on Terrorism, released in June, list Iran as a state sponsor of terrorism and document its continued interference in sovereign countries around the region.
How large a part does trade and commerce play in your overall duties as ambassador?
These days I spend probably about 70 per cent of my time focusing on defence and security. Although that relationship is very important, it’s frustrating that I don’t get more chances to talk about the trade and commercial relationship between the UAE and US. The bilateral trade and commercial relationship is an untold success story. The UAE and US have a strong, vibrant trade relationship that brings a lot of benefits to both countries, and yet many people aren’t aware of it.
But even though it may be less known than other aspects of the bilateral [relationship], the economic and trade relationship has always been a key pillar of the friendship between the US and the UAE.
And helping build a strong trade relationship is an important part of the work we do at the embassy.
We are also fortunate to have fantastic partners at the US-UAE Business Council, the American Chamber of Commerce in Abu Dhabi, and the American Business Council of Dubai and the Northern Emirates. They play an essential role in strengthening bilateral business ties.
Of course, security and a strong economy go hand-in-hand. By expanding economic opportunity, we are helping create a more stable region – which is in the interests of both the US and the UAE.
By making the UAE into an economic engine for the region, we are mapping out a blueprint that replaces the extremism and violence that we hear too much about in the headlines with a new sense of opportunity, optimism, and openness. The US is a key partner in making this vision a reality.
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